Ex-Alderman Ed Vrdolyak Pleads Guilty in Alleged Settlement Scheme

Vrdolyak, 81, was indicted in 2016 on charges of tax evasion and obstructing and impeding the IRS, according to a 19-page indictment

vrdolyak change plea

Former Chicago Ald. Ed Vrdolyak has pleaded guilty to federal charges stemming from a case in which authorities allege he secretly collected millions of dollars from a settlement with tobacco companies. 

Accoridng to Vrdolyak's attorney Mike Monico, the former alderman could have faced up to five years in prison on the charges he faced. A sentencing hearing will be held on July 23 to determine his fate. 

Vrdolyak, 81, was indicted in 2016 on charges of tax evasion and obstructing and impeding the IRS, according to a 19-page indictment that outlined his role in a scheme to pocket millions from a $9.3 billion settlement reached between the state of Illinois and tobacco companies in 1998.

Vrdolyak pleaded not guilty in November 2016, but on Thursday he appeared before Judge Robert Dow to change his plea. 

The change of plea comes more than two years after prosecutors accused the former powerhouse Chicago politician and an associate, attorney Daniel Soso, of secretly pocketing more than $10 million in fees from the 1998 settlement.

As part of that settlement, over $188 million was paid to four law firms that helped with the litigation. One of those firms, Seattle-based Hagens Berman, allegedly agreed to pay Vrdolyak and Soso fees from the settlement, even though they, according to the indictment, "did not perform any work," nor were they authorized to work, on the case.

Prosecutors also alleged that Vrdolyak attempted to help Soso dodge federal income taxes on the payments.

At the time of his indictment, an attorney for Vrdolyak called the charges "confusing and disappointing," adding that the former alderman "had the money set aside in escrow" and was "waiting for the government to send us the appropriate documents."

"In Illinois you’re entitled to pay referral fees, and they don’t accuse us of doing anything wrong with that,” Vrdolyak's longtime lawyer Michael Monico said at the time. “The state got a good deal and the citizens got a good deal, because the state received a lot of money as a result of the lawyers who helped."

In 2008, Vrdolyak pleaded guilty to a charge of conspiracy to commit mail and wire fraud in connection with a real estate kickback scheme involving the sale of a Gold Coast medical school building. The judge in that initially sentenced him to probation, but on appeal, he was sentenced to 10 months in prison, which he served from 2010 to 2011.

First elected in the city's 10th Ward in 1971, Vrdolyak earned the moniker "Fast Eddie" for his penchant for cutting backroom deals. He is perhaps best known for leading a majority-white group of alderman dubbed the "Vrdolyak 29" who stymied the agenda of Mayor Harold Washington, Chicago's first black mayor, on City Council in the 1980s.

Vrdolyak was previously scheduled to go to trial in the tobacco settlement case on April 15.

Contact Us